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Internationalization: The Indicators Of Globalization

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The indicators of globalization

Globalization is the process of increasing interaction and interdependence between societies, economies and nations across large distances. The term globalization not only refers to the movement of goods and services across countries and that consumption has been internationalized through cross-border trade, production has been also internationalized by foreign direct investment. Globalization sometimes can be good and sometimes can be bad. Its effect differs from one country to another. Globalization participates in the increasing power of multinationals all over the world in addition to worldwide spreading of human rights and knowledge. Globalization affects every part of our life- health, wealth, cultural …show more content…

Economic integration collects data of foreign direct investment (FDI), trade, investment income payments and receipts in addition to portfolio capital flows. Personal contact assesses cross-border remittances and personal transfers (including compensation to employees, worker remittances and other person to person and non-governmental transfers), international telephone traffic, international travel and tourism. Technological connectivity tracks the number of internet hosts, internet users and secure servers at which encrypted transactions are carried out. The final component is political engagement which tracks the countries participation in international treaties, memberships in international organizations, personnel and financial contributions to U.N. Security Council missions and the governmental transfer payments and receipts. Outward and inward flows are added, and then divide the sum by the country's nominal economic output (GDP) or its population. Two political engagement indicators remain by absolute numbers which are number of treaties ratified and membership in international organizations, a variable is added this year to measure the …show more content…

A New Globalization Index (NGI)" by Petra Vujakovic a new composite globalization index is presented. In the Index a new variables have been used. The index considers geographical distances between countries in the trade variable to differentiate between globalization and regional integration. The New Globalization index consists of three spheres which are the economic, political and social spheres. The economic sphere consists of nine variables. Trade in Goods (weighted with geographical distances) in percentage of GDP which is bilateral imports and exports of goods (Data in percentage of GDP) and Geographical distances between countries in km, using city-level data to assess the geographic distribution of population inside each country. Trade in Services which is the sum of services exports and imports (Data in percentage of GDP). FDI Stock which is the sum of inward and outward foreign direct investment stock (Data in percentage of GDP). FDI Flow which is the sum of inflows and outflows of foreign direct investment recorded in the balance of payments financial account (Data in percentage of GDP). Portfolio Investment Stock which is a new introduced variable that is equal to the sum of portfolio investment stock assets and liabilities from the international investment position records (Data in percentage of GDP). Portfolio Investment Flow which is the sum of inflows and outflows of portfolio investment recorded in the balance

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